Bank of England Chief Andrew Bailey says El Salvador adopting Bitcoin as legal tender

Bank of England Chief Andrew Bailey says El Salvador adopting Bitcoin as legal tender

Bank of England Chief Andrew Bailey expressed concern for the citizens of El Salvador after the country adoptedBitcoin as legal tender after the adoption of it as a legal tender on Thursday by the Cambridge University students union.

Bailey said the move to adoptBitcoin within a dual currency system was concerning, while also saying that volatility would affect most of the country's economy.

This isn't the first instance of Bailey warning of the dangers of cryptocurrencies. In May, Bailey said that cryptocurrencies have no intrinsic value and investors should be prepared to lose all their money.

El Salvadoran made history on September 7, as the first country to acceptBitcoin as a legal tender.

The move has divided opinion, with international legacy agencies such as the IMF and the World Bank expressing their disapproval.

President Bukele will bring more jobs, financial inclusion, and foreign investment, because he is committed to the cause.

El Salvadoran plans to build a Bitcoin City at the base of the Conchaga volcano, located in the southeastern region of the country. The issuance of volcano bonds would provide development funds to the Central American country.

Graham Stock, a senior vice president at Blue Bat Asset Management, said raising money throughBitcoin could discourage El Salvador from building sustainable spending policies.

Stock stated that El Salvadoran's Bitcoin experiment is an untested strategy, and that there is every chance that the country will need IMF support.

Bailey said it was concerning that a country would choose to go this route, despite his skepticism over El Salvador's Bitcoin experiment. Bailey said there is a strong case for digital currencies and that they aren't dismissing them completely. The currency is only stable in the context of a stable currency.

On the day thatBitcoin became legal tender in El Salvador, IOHK CEO Charles Hoskinson framed the situation as a blow for legacy agencies, saying that these agencies are adversial to everyday people.